Amy Traub

EFCA 101: How We Can Bail Ourselves Out

First things first. Congress and the incoming Obama Administration are hammering out an economic recovery package with major investments in infrastructure, education, energy efficiency, health programs and aid to the states and localities (see Paul Krugman’s excellent discussion of why such assistance is particularly vital during an economic downturn). While the to-be-decided details of the plan will be critical to its success, the broad outlines look like precisely what the ailing U.S. economy desperately needs: a plan that creates jobs quickly while addressing the nation’s long-term public investment priorities and helping those hardest hit by the recession. Phew!

I know what they say: don’t count your policy victories before they’re passed. But while we work for the right kind of stimulus, we also need to think about the wider context. As we look for a path back to the economic good times we’ve also got to face the fact that, for a lot of Americans, the good times of the 21st Century so far weren’t actually that good. At the peak of the last economic cycle, during a time of high productivity and soaring corporate profits, middle-class Americans still hadn’t recovered the ground lost in the last downturn. We earned less, borrowed more to make ends meet, and were even less likely to have employer-sponsored health care. Something is deeply wrong with that picture.

What this tells us is that working people don’t have enough power in the labor market to ensure that their incomes keep pace with the rising cost of living – even during the best of times. Historically, one powerful way to build that power has been through labor unions.

Unions enable their members to demand jobs that are capable of sustaining a middle-class standard of living, with dignified wages, leave policies, health care, and retirement plans. Workers represented by unions earn, on average, 30% more than nonunion workers. And 79% of union members have employer-provided health insurance, compared with 50% of nonunion workers. The rates are nearly identical for employer-sponsored retirement plans. The benefits of union membership are most pronounced for people of color and for women. In areas where unions represent a high proportion of workers a particular industry, they can even help to raise industry standards across-the-board: improving wages and job quality even for workers who aren’t members. Not surprisingly, as union membership has declined over the past decades, the middle-class squeeze has intensified.

Organizing a union is supposed to be a right in the United States, but legal protection for organizing has eroded over time. A bill called The Employee Free Choice Act would restore that right, streamlining the process for employees to decide on union representation. Predictably, corporations that would rather not pay higher wages or contribute to employee health care oppose the bill fiercely. But it's a fight worth having. In times like these we need not only a bailout, but the tools to bail ourselves out. Once a stimulus plan is in place, we need the Employee Free Choice Act.

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